Support through furloughing and the Coronavirus Business Interruption Loan Scheme has been “both vital and appreciated” at north-east construction firm Chap, the company’s boss has said.
But Hugh Craigie, Chap’s managing director, added the financial support had “merely softened the massive financial blow that Covid has had on our business and many other employers like us”.
Speaking as Westhill-based Chap reported results for the year to September 30 2020, Mr Craigie said: “We are delighted to see business life edge back towards normality but the legacy of Covid will remain for many months to come.
“That said, I am confident that the Chap team is well-positioned and ready for business levels picking up over the coming months.”
In its latest accounts, Chap said it traded profitably – well ahead of budget – during the first half of its 2019-20 financial year, following losses of nearly £4 million in the previous 12 months.
‘All but closed’
But the arrival of the coronavirus pandemic and a construction shutdown in March 2020 halted progress.
Chap said it was “all but closed” for the initial 11-week lockdown as businesses of all kinds ground to a halt.
As a result, full-year turnover dropped slightly to £29.6m and the company suffered pre-tax losses of £934,000.
Chap’s construction and civil engineering divisions saw a combined turnover drop of 23.4%, reflecting time lost due to Covid-19.
The legacy of Covid will remain for many months to come.”
Hugh Craigie, mnanaging director Chap Group
The company said its commitment to the growth, efficiency and margin enhancement of these core divisions was “undiminished” and fresh investment in them was planned for the year ahead.
A £47m social housing project for Aberdeen City Council, which broke ground in Summerhill last year, is “progressing well”, with several of the blocks’ kits erected, masonry “well under way” and fit-out started, Chap said.
The firm anticipates another three social housing developments coming on stream in the coming months.
A brief post-lockdown surge in sales for Chap Homes, at Crest of Lochter in Inverurie and Countesswells, near Aberdeen, saw some lost ground made up but annual turnover for the division “still fell short of expectations”.
Both sites have enjoyed “steady” sales in recent months but material shortages are causing scheduling headaches, Chap said, adding: “The impact of this has, however, been adequately contained thus far.”
Chap Quarries’ operations shut completely for the 11-week lockdown last year but annual turnover fell from the division fell “only 6.4%”, Chap said.
The exit of main contractor Dragados from the £350m-plus Aberdeen harbour expansion project led to the cancellation of a “sizable” sand and aggregate order.
Chap later sold its quarrying operations to JKR Quarries and Concrete Products, , which is based near Ellon.
The sale to family-owned JKR included a ready-mix concrete facility at Balmedie Quarry, land and associated planning permission at Muirtack, Ellon, and Chap’s quarrying and ready-mix operation at Park, Drumoak.
Group employee numbers reduced from 180 in September 2019 to 172 in September 2020, the Chap (Holdings) accounts show.
Following the sale of Chap Quarries, the group now employs 141 people across its three remaining trading divisions.